However, company currently facing increasing cost for raw materials

Baking company Honey Bun has been ramping up its marketing activities to boost sales, particularly in the December 2020 quarter.

During first quarter, Honey Bun, principal activities of which comprise the manufacture and distribution of baked products to the local and export markets, earned revenues of $461.3 million, which is up nine per cent over the same period in 2019. Gross profits for the quarter was $218.1 million, up three per cent over prior year.

However, net profit was down 29 per cent to close the December 2020 quarter at $34.8 million below the prior year. In its quarterly report to shareholders, Chief Executive Officer Michelle Chong points to the sharp increase in the cost of production in recent months, particularly in some key raw materials, with which the company is now facing.

She notes that while the economy continues to recover from the effects of lockdowns, disposable incomes and consumer activity remain muted. As such, Honey Bun, which is based at 26 Retirement Crescent, Kingston 5 had to boost in expenditure on marketing activities.

This has contributed to operating expenses closing the period at $176.0 million or 14 per cent over prior year.

Improving manufacturing technologies

In addition, Honey Bun continues to focus on improving manufacturing technologies and efficiencies, which saw it investing an additional $39.6 million in property plant and equipment in the December quarter. This represented an increase of 199 per cent over the same period in December 2019.

Overall receivables fell by $53.7 million to close at $74.7 million, while overall trade and other payables fell by $84.0 million to close at $129.4 million. Net current assets closed the period at $305.8 million, or 41 per cent over the prior year.

In October 2020, the company introduced the Hot Dog Rolls under Honey Bun’s Shorty brand, joining the Shorty Loaf Bread (Bran and White) and the Shorty Burger Bread. The Hot Dog Roll was launched to satisfy consumers baking needs especially during the COVID-19 pandemic, as it was an easy snack to make at home.

The product is tastefully covered in sesame seeds, and available in packets of eight.

Staff wellness programme launched

In November, the company launched a staff wellness programme to help team members cope with the psychosocial effects of the pandemic. The response has been positive and encouraging.